Starmer calls emergency meeting on Iran war’s economic fallout

Chair of the European Parliament’s Iran delegation has warned that President Donald Trump’s threat to target Iran's power plants risks dragging the region into wider chaos.

“Trump’s ultimatum won’t deter or defeat IRGC — they are ready to drag everyone into the abyss,” German MEP Hannah Neumann wrote on X.

“Hitting civilian infrastructure in Iran, especially nuclear sites, risks disaster and punishes only those fighting for a Free Iran,” she added. “This is not strategy, this is madness.”

Oil prices rose on Sunday after Iran threatened to shut down the Strait of Hormuz indefinitely in response to President Donald Trump’s ultimatum demanding the restoration of oil traffic through the strategic waterway.

Brent crude, the global benchmark, climbed 1.69% to about $114.09 a barrel, while US crude rose 2% to $100.29.

Analysts say markets are increasingly pricing in the risk of prolonged disruption to energy flows through the strait, a route that normally carries about a fifth of global oil and liquefied natural gas shipments.

Goldman Sachs said Friday that elevated prices could persist through 2027.

The exchange of threats marks a sharp escalation in the three-week-old war and raises the prospect of tit-for-tat strikes on civilian infrastructure across the region.

“If Iran’s fuel and energy infrastructure is attacked by the enemy, all energy infrastructure, as well as information technology and water desalination facilities belonging to the United States and the regime in the region will be targeted,” Iranian military spokesman Ebrahim Zolfaqari said, according to state media.

Much of the region depends heavily on energy-intensive desalination plants for drinking water, including systems that supply all potable water in Bahrain and Qatar and the majority of water used in the United Arab Emirates.

Iran’s parliament speaker Mohammad Baqer Ghalibaf warned on X that attacks on Iranian power plants could lead to the “irreversible destruction” of energy facilities across the Middle East.

Foreign minister Abbas Araghchi struck a softer tone, saying that Tehran had not yet moved to choke off global shipping through the Strait of Hormuz.

“The Strait of Hormuz is not closed,” he wrote on X. "hips hesitate because insurers fear the war of choice you initiated—not Iran."

Iran’s Revolutionary Guards also warned that the Strait of Hormuz — the route through which roughly a fifth of global oil and liquefied natural gas normally passes — would remain shut until Iranian power plants damaged in the conflict are rebuilt.

The escalating rhetoric comes as fighting between Iran and Israel continued overnight.

Dozens were reported injured in Iranian missile strikes on the southern towns of Arad and Dimona on Sunday night.

The rising threats have prompted diplomatic intervention.

In a call with Saudi Crown Prince Mohammed bin Salman, France’s President Emmanuel Macron urged all sides to halt attacks on energy and civilian infrastructure and called on Iran to restore freedom of navigation in the Strait of Hormuz.

“It is more essential than ever that all parties agree to establish a moratorium on energy and civilian infrastructure,” Macron said in a post on X.

More than 2,000 people have been killed since the United States and Israel launched attacks on Iran on February 28, a conflict that has rattled global markets, pushed up fuel prices and raised fears of a broader regional war.

Saudi Aramco Chief Executive Amin Nasser has cancelled his planned appearance at the CERAWeek energy conference in Houston, choosing to remain in Saudi Arabia as tensions linked to the Iran conflict continue to escalate, an industry source told Reuters.

Nasser, who has led the world’s largest oil exporter for more than a decade, is typically one of the headline speakers at the conference, one of the energy industry’s biggest annual gatherings.

CERAWeek, organised by S&P Global and opening on Monday, brings together top executives, government officials and policymakers from around the world to discuss the outlook for global energy markets.

Nasser’s withdrawal underscores the pressure facing energy producers in the region as the Iran crisis deepens.

Iran’s foreign minister Abbas Araghchi said on Sunday that commercial shipping through the Strait of Hormuz has slowed because insurers are wary of the conflict, blaming the United States for creating the conditions that have unsettled maritime traffic.

“The Strait of Hormuz is not closed,” Araghchi wrote on X. “Ships hesitate because insurers fear the war of choice you initiated—not Iran.”

“Freedom of Navigation cannot exist without Freedom of Trade. Respect both—or expect neither,” he added. “No insurer—and no Iranian—will be swayed by more threats. Try respect.”